A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues: year 1: $50,000 year 2: $50,000 year 3: $50,000 year 4: $60,000 The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%. 1. What is the net present value (NPV)? A.) -7,890.99 B.) 7,899.99 C.) -8,667.61 D.) 9,100.51
A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues: year 1: $50,000 year 2: $50,000 year 3: $50,000 year 4: $60,000 The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%. 1. What is the net present value (NPV)? A.) -7,890.99 B.) 7,899.99 C.) -8,667.61 D.) 9,100.51
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 17EA: Gardner Denver Company is considering the purchase of a new piece of factory equipment that will...
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A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues:
year 1: $50,000
year 2: $50,000
year 3: $50,000
year 4: $60,000
The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%.
1. What is the
A.) -7,890.99
B.) 7,899.99
C.) -8,667.61
D.) 9,100.51
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